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Supporting weakly Pareto optimal allocations in infinite dimensional nonconvex economies

Author

Listed:
  • Monique Florenzano

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Pascal Gourdel

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Alejandro Jofré

    (CMM - Centre de modélisation mathématique / Centro de Modelamiento Matemático [Santiago] - UCHILE - Universidad de Chile = University of Chile [Santiago] - CNRS - Centre National de la Recherche Scientifique)

Abstract

In this paper, we prove a new version of the Second Welfare Theorem for economies with a finite number of agents and an infinite number of commodities, when the preference correspondences are not convex-valued and/or when the total production set is not convex. For this kind of nonconvex economies, a recent result obtained by one of the authors, introduces conditions which, when applied to the convex case, give for Banach commodity spaces the well-known result of decentralization by continuous prices of pareto optimal allocations under an interiority condition. In this paper, in order to prove a different version of the Second Welfare Theorem, we reinforce the conditions on the commodity space, assumed here to be a Banach lattice, and introduce a nonconvex version of the properness assumptions on preferences and the total rpoduction set. Applied to the convex case, our result becomes the usual Second Welfare Theorem when properness assumptions replace the interiority condition. The proof uses a Hahn-Banach Theorem generalization by Borwein-Jofré which allows to separate nonconvex sets in general Banach spaces.

Suggested Citation

  • Monique Florenzano & Pascal Gourdel & Alejandro Jofré, 2006. "Supporting weakly Pareto optimal allocations in infinite dimensional nonconvex economies," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00086819, HAL.
  • Handle: RePEc:hal:cesptp:halshs-00086819
    DOI: 10.1007/s00199-005-0033-y
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00086819
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    1. Monique Florenzano & Pascal Gourdel & Alejandro Jofré, 2006. "Supporting weakly Pareto optimal allocations in infinite dimensional nonconvex economies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 29(3), pages 549-564, November.
    2. Starr, Ross M, 1969. "Quasi-Equilibria in Markets with Non-Convex Preferences," Econometrica, Econometric Society, vol. 37(1), pages 25-38, January.
    3. Tourky, Rabee, 1998. "A New Approach to the Limit Theorem on the Core of an Economy in Vector Lattices," Journal of Economic Theory, Elsevier, vol. 78(2), pages 321-328, February.
    4. Bonnisseau, Jean-Marc & Cornet, Bernard, 1988. "Valuation equilibrium and pareto optimum in non-convex economies," Journal of Mathematical Economics, Elsevier, vol. 17(2-3), pages 293-308, April.
    5. Podczeck, Konrad, 1996. "Equilibria in vector lattices without ordered preferences or uniform properness," Journal of Mathematical Economics, Elsevier, vol. 25(4), pages 465-485.
    6. Rabee Tourky, 1999. "The limit theorem on the core of a production economy in vector lattices with unordered preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 14(1), pages 219-226.
    7. Mas-Colell, Andreu, 1986. "The Price Equilibrium Existence Problem in Topological Vector Lattice s," Econometrica, Econometric Society, vol. 54(5), pages 1039-1053, September.
    8. Anderson, Robert M, 1988. "The Second Welfare Theorem with Nonconvex Preferences," Econometrica, Econometric Society, vol. 56(2), pages 361-382, March.
    9. Guesnerie, Roger, 1975. "Pareto Optimality in Non-Convex Economies," Econometrica, Econometric Society, vol. 43(1), pages 1-29, January.
    10. Mas-Colell, Andreu & Zame, William R., 1991. "Equilibrium theory in infinite dimensional spaces," Handbook of Mathematical Economics, in: W. Hildenbrand & H. Sonnenschein (ed.), Handbook of Mathematical Economics, edition 1, volume 4, chapter 34, pages 1835-1898, Elsevier.
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    Cited by:

    1. Monique Florenzano & Pascal Gourdel & Alejandro Jofré, 2006. "Supporting weakly Pareto optimal allocations in infinite dimensional nonconvex economies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 29(3), pages 549-564, November.
    2. Jean-Marc Bonnisseau & Matías Fuentes, 2020. "Market Failures and Equilibria in Banach Lattices: New Tangent and Normal Cones," Journal of Optimization Theory and Applications, Springer, vol. 184(2), pages 338-367, February.
    3. W D A Bryant, 2009. "General Equilibrium:Theory and Evidence," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 6875, August.
    4. Maria Carmela Ceparano & Federico Quartieri, 2020. "On Pareto Dominance in Decomposably Antichain-Convex Sets," Journal of Optimization Theory and Applications, Springer, vol. 186(1), pages 68-85, July.
    5. Ceparano, Maria Carmela & Quartieri, Federico, 2019. "A second welfare theorem in a non-convex economy: The case of antichain-convexity," Journal of Mathematical Economics, Elsevier, vol. 81(C), pages 31-47.
    6. Pirro Oppezzi & Anna Rossi, 2015. "Improvement Sets and Convergence of Optimal Points," Journal of Optimization Theory and Applications, Springer, vol. 165(2), pages 405-419, May.
    7. Paul Oslington, 2012. "General Equilibrium: Theory and Evidence," The Economic Record, The Economic Society of Australia, vol. 88(282), pages 446-448, September.

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    More about this item

    Keywords

    Second welfare theorem; nonconvex economies; Banach spaces; subdifferential; Banach lattices; Properness assumptions;
    All these keywords.

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D6 - Microeconomics - - Welfare Economics

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